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Defaulting Contractor Entitled to Quantum Meruit

The Trumbull County Court of Appeals has found that a defaulting contractor still may collect the net value of work installed, under the equitable doctrine of quantum meruit.

In the case, a homeowner terminated the construction contractor’s work “after significant work had been performed.”  Comparing the total cost of work performed, the Court deducted the homeowner’s damages, and awarded the net value.  The Court held that, because of the contractor’s breach, the contractor could not collect under a contract theory.  “Thus, ‘where the work of a defaulting contractor has contributed substantial value to the other contracting party’s property, the defaulting party is entitled to recover the value of his work and materials on a quantum meruit basis, the recovery being reduced to the extent of damage the breach may have caused the other party.’ ” *** “This is referred to as quasi-contractual relief and is provided to prevent unjust enrichment to the non-breaching party.”

Since the Court awarded no contract damages, the Court held that the contractor was not entitled to statutory pre-judgment interest.

Gray v. Petronelli, 2017-Ohio-2601.

If you have questions, please do not hesitate to contact attorney Luther L. Liggett of Graff & McGovern at 614-228-5800, ext. 6.